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How to determine the company size category

The following step-by-step instructions are to help you to determine the company size category in accordance with Commission Recommendation 2003/361/EC.

Step 1

The first step in establishing the data for the determination of the company size category is to assess whether, at the time of the submission of the registration in REACH-IT / submission of the documents for SME check under BPR, the company is autonomous, or whether partner or linked enterprises, as defined in Article 3 of the Annex to Commission Recommendation 2003/361/EC, are to be considered too.

In general:

The enterprise is autonomous if it is not classified as a partner or linked enterprise within the meaning of Article 3 of the Annex to the Commission Recommendation 2003/361/EC. For example, an enterprise is autonomous if it holds less than 25% (capital or voting rights) in any other company and if no other company holds more than 25% in the enterprise.

An enterprise is considered a partner to another enterprise if it holds, either solely or jointly with one or more linked enterprises within the meaning of Article 3(3) of the Annex to the Commission Recommendation 2003/361/EC, at least 25%, but no more than 50% in another company.

An enterprise is consideredas linked to another enterprise if it holds more than 50% of the members' voting rights in another company and/or if an enterprise directly or indirectly controls, or has the capacity to control, the affairs of another company.

A company will also be considered to be linked if a relationship exists through an individual or group of individuals acting together under the condition that the companies are engaged (wholly or partly) in the same markets or in ‘adjacent markets' (markets for products or services that are directly upstream and downstream of each other).

If 25% or more of the capital or voting rights of the enterprise are directly or indirectly controlled, jointly or individually, by one or more public bodies, the enterprise cannot be considered an SME.

Investors listed in Article 3, paragraph 2, second subparagraph to the Annex of the Recommendation, such as universities or autonomous local authorities, which have the status of a public body under national law, are not concerned by this rule. They may hold a participation of between 25%, but no more than 50%, in an enterprise without losing their SME status.